The church, said to be the site of Jesus' crucifixion and burial, was struggling with a $2.3 million bill owed to an Israeli water company.

But the deputy of Jerusalem's Greek Orthodox Patriarch, Father Issa Misleh, said theJerusalem water company had agreed to write off the church's debt. The church's bank account has also been unfrozen, Father Misleh said.

Earlier this month the Patriarchate, which has extensive and valuable property holdings in the Holy Land and maintains a headquarters in the ancient church, had its bank account frozen, according to an official at the water company, Hagihon.

A report in Israeli newspaper, Maariv, said the Patriarchate had been threatening to shut the doors of the church, which is a major pilgrimage site for millions of tourists.

Hagihon, however, had initially said the law did not permit the company to make such exemptions, before agreeing to write off the church's debt.

The church lies deep inside Jerusalem's Old City walls. It encompasses Golgotha, or Calvary, where Jesus is believed to have been crucified and the tomb where he was buried and resurrected.

A church was first built there in the 4th century under Constantine the Great, the first Christian Roman emperor, whose mother, Queen Helena, had visited the site and identified it as the place of Jesus' resurrection.